Research › Search › Judgment

Telangana High Court · body

2021 DIGILAW 217 (TS)

D. Srinivas Rao v. State of Telangana State

2021-07-05

B.VIJAYSEN REDDY

body2021
ORDER : (B. Vijaysen Reddy, J.) I.A. No. 2 of 2021 in CRLP. No. 3963 of 2021 & 1. The implead petitions are not opposed. Hence ordered. CRLP Nos. 3963 and 4007 of 2021: These two petitions are filed, under Section 438 of the Criminal Procedure Code, seeking grant of anticipatory bail to the petitioners, who are A1 and A2 respectively in Cr. No. 310 of 2021 on the file of the Station House Officer, Ramachandrapuram Police Station, BHEL, Cyberabad, registered for the offences under Sections 406, 420 of the Indian Penal Code and Section 5 of the Telangana State Protection of Depositors of Financial Establishments Act, 1999 (for short 'the Depositors Act'). 2. A report was lodged by the defacto complainant- respondent No. 2 stating that he had been working in BHEL for seven years. Mr. D. Srinivas Rao (A1), the President of the Vivekananda BHEL Employees Mutually Aided Co-operative Housing Building Society Limited (Society) and the executive body started the said society vide registration No. CSRDDCO/2017/2550. They released brochure on 11.09.2018 stating that they propose to develop house plots (admeasuring 200 sq. yards) wherein they promised to construct houses in plots of 200 sq. yards at Muthangi Village for all the members, for which every member has to pay Rs.38,75,000/- for each plot. The President and the Executive Body members invited Tribha Venture Builder, Goverdhan Reddy (A2) to build houses in the said plots. A2 had discussions with the complainant and other members. A1 and A2 purchased and got registered Ac. 12.26 guntas of land in Muthangi. The complainant believed them and paid an amount of Rs.5,11,000/- in two spells through challan No. 5845297. Along with complainant about 313 persons paid money for purchasing and developing plots. In total, 18 crores was collected from the complainant and others. After some days, the complainant and other members asked the accused about the plots and they dodged the matter on one pretext or the other. The President, Secretary and Chief Adviser of the Society confessed in the Society meeting that they utilized the money invested by the complainant and other for their personal necessities. The President and the members started the society with the money invested by the complainant and other members and cheated them. Hence, action may be taken against A1 and A2. 3. Mr. Brahmandandi Ramesh, learned counsel for the petitioner/A1 in CRLP. The President and the members started the society with the money invested by the complainant and other members and cheated them. Hence, action may be taken against A1 and A2. 3. Mr. Brahmandandi Ramesh, learned counsel for the petitioner/A1 in CRLP. No. 3963 of 2021, submitted that the Society has entered into an MOU with Tribha Ventures represented by the Managing Director (A2) on 09.11.2018 for procurement of land and for developing the house sites of 200 sq. yards each with a built up area of 1150 sq. feet as per HMD Layout and permission. It was mutually agreed by both the parties that for 1 acre of land the builder has to spend Rs.1,00,00,000/- and the society has to bear Rs.30,00,000/- per acre and it was decided to purchase the land at Rs.1,30,00,000/- per acre with the said contribution. It was agreed that in case there is an enhancement of land value, the society shall bear the extra price. Due to steep increase in land prices, the landlords did not come forward to register the land as per the agreement, by demanding additional sale consideration. The society had incurred heavy burden and could not comply the conditions laid out in the MOU on account of unforeseen situation due to COVID-19 pandemic. There was step increase in land prices. The society and the builder were compelled to spend more money. The society collected Rs.18,87,47,869/- but the society has spent to the tune of Rs.18,94,82,370/-. The society purchased an extent of Ac. 12.26 guntas of land with the money collected from its members. Altogether along with builder the society spend Rs.27,00,00,000/-. Due to landlords' resiling from the contract on account of increased of land value and also due to COVID-19, the execution of the work and the construction of houses could not take place. The society conducted meetings regularly informing the members. The general body meetings were conducted and the accounts of the society were audited by an approved Chartered Accountant and the same were also submitted to the District Cooperative Officer, Government of Telangana. The Society is not a financial institution and as such, the provisions of the Depositors Act, 1999 are not attracted. The petitioner is an employee of BHEL retired on superannuation as Sub-Additional Engineer Grade-I. The petitioner will cooperate in the investigation and if anticipatory bail is not granted, he will suffer irreparable loss and injury. 4. The Society is not a financial institution and as such, the provisions of the Depositors Act, 1999 are not attracted. The petitioner is an employee of BHEL retired on superannuation as Sub-Additional Engineer Grade-I. The petitioner will cooperate in the investigation and if anticipatory bail is not granted, he will suffer irreparable loss and injury. 4. Mr. S. Surender Reddy, learned counsel for the petitioner/A2 in CRLP. No. 4007 of 2021, submitted that MOU dated 09.11.2018 was entered into by the society with the Tribha Ventures, represented by its Managing Director, A2. A2 was authorized by the society to purchase the land. A2 invested Rs.11 crores apart from Rs.4 crores invested by the society. Under the MOU dated 09.11.2018, the society agreed to pay Rs.30,00,000/- per acre as advance. A2 having paid huge amount is awaiting permission from various departments and A2 has to complete the construction within 2 ½ years with a grace period of six months. Due to unforeseen circumstances, the time for completion was extended. However, due to COVID-19 pandemic situation, the permission could not be obtained. As per clause 13 of the MOU, if any dispute arises, has to be resolved before an arbitrator but the straightaway the complainant approached the police. A2 intended to secure necessary permission from HMDA to construct 300 residential houses, each comprising of 200 sq. yards of plot with built up area of 1150 sq. feet. A2 approached HMDA to know the nature of use of land and it is learnt that Ac. 7.04 guntas is covered by public zone and only Ac. 3.35 guntas is permitted for residential purpose covered by Sy. Nos. 236 and 324. A2 has discussion with the society and ultimately they came to an understanding vide written document dated 07.03.2021 that the society agreed to take Ac. 5.05 guntas of land leaving Ac. 5.30 guntas to the share of A2. With great difficulty A2 accepted the said proposal. A2 is a builder and he is falsely implicated. A2 is ready to cooperate with the investigation. 5. Mr. K.S. Rahul, learned counsel for the defacto complainant/respondent No. 2 in both the petitions, submitted that A1 and A2 have conspired to lure the members of the society, collected huge amount of more than Rs.18 crores, having promised to purchase the subject land in Muthangi village. A2 is ready to cooperate with the investigation. 5. Mr. K.S. Rahul, learned counsel for the defacto complainant/respondent No. 2 in both the petitions, submitted that A1 and A2 have conspired to lure the members of the society, collected huge amount of more than Rs.18 crores, having promised to purchase the subject land in Muthangi village. A1 got the same registered in the name of A2's company in respect of the subject land by utilizing the money paid by 300 members of the society. Instead of purchasing the land in the name of the society, A1 got purchased the land in the name of A2. There is no evidence of payment of money for purchase of land from the bank statements of the society. It is revealed that lakhs of rupees have been paid towards hotels, fabricator, garment shop etc. If the petitioners are granted anticipatory bail, there is every chance of concealment of evidence. It will be difficult for the police to investigate as to how the money was utilized and diverted for wrongful purposes. In spite of best efforts of the police, so far no information was elicited and in view of the serious financial fraud, it is necessary for the police to interrogate A1 and A2. Notice under Section 41-A Cr.P.C. was issued to A1 but there was no cooperation and thus, the petitions be dismissed in the interest of justice. 6. Heard the learned counsel and perused the record. 7. There is no dispute that the complainant and the other member of the society have contributed more than Rs.18 crores for purchase of subject land. It is also not in dispute that the land at Muthangi village was identified for development of plots and construction of houses. The stance of A1 is that A2 is the developer and was liaisoning for procurement of land, development of plots and construction of houses. It is for that purpose, more than Rs.18, crores was contributed by the members of the society to A2 for purchase of subject land at Muthangi village. It is borne out of the record and also an admitted fact that no piece of land, identified at Muthangi village, was purchased in the name of the society so far. The document filed by A2 in CRLP. It is borne out of the record and also an admitted fact that no piece of land, identified at Muthangi village, was purchased in the name of the society so far. The document filed by A2 in CRLP. No. 4007 of 2021 clearly reveals that the entire land was purchased in the name of Tribha Ventures represented by A2 under registered sale deeds. While it is the case of A1 that Rs.30,00,000/- per acre is to be contributed by the members of the society and Rs.1,00,00,000/- per acre by A2, it is the case of A2 that he has invested (money to the tune of Rs.11 crores and he received only Rs.4 crores from the society. 8. The MOU dated 09.11.2018 discloses that land in Sy. Nos. 310 to 342 at Muthangi Village, Patancheru Mandal, Sangareddy District, was identified by the society through A2. A2 agreed to procure the said land for construction of 300 houses in Phase-I. He held deliberations in the presence of the President and Secretary of the society. A2 negotiated with the pattedars on behalf of the society. The development work of laying plots and construction of independent houses will be entrusted to the second party (A2). The first party (A1) shall pay Rs.30,00,000/- per acre as advance. The differential amount of Rs.1,30,00,000/- shall be paid before the registration. 300 houses each consisting of 200 sq. yards with a built up area of 1150 sq. feet will be constructed within 2 ½ years with a grace period of six months. In case, there is variation in plot area, addition sum of Rs.11,000/- per sq. yard and Rs.1,1,28/- per sq. feet will be paid. 9. Learned counsel for the respondent No. 2 had drawn attention of this Court to the brochure issued in the name of the society, which shows name of the project as Tribha Ventures. It is highlighted on the brochure that as "200 yards, 1150 sft." and page 2 of the brochure also shows plan of East and West facing houses. The statement of account of the society discloses that lakhs of rupees have been collected from the members of the society under the head BHEL Township (the subject project). There were cash withdrawals from time to time. The learned Assistant Public Prosecutor submitted that the petitioners involved in embezzlement of funds invested by gullible members of the Society. The statement of account of the society discloses that lakhs of rupees have been collected from the members of the society under the head BHEL Township (the subject project). There were cash withdrawals from time to time. The learned Assistant Public Prosecutor submitted that the petitioners involved in embezzlement of funds invested by gullible members of the Society. There is clear evidence pointing to the guilt of the accused. The matter requires thorough investigation and it is not a fit case for anticipatory bail. 10. It is clear from the above documents that there is deep rooted conspiracy between A1 and A2. It is surprising as to how money collected from the members of the society by A1 has been utilized for purchasing the land in the name of A2. It is revealed from the documents, as discussed above, that A2 is only a developer. Though it is stated that A2 has been appointed for liaisoning to procure the land and later to develop plots and construct houses, it is to be noted that money to the tune of more than Rs.18 crores was paid by the society and the same is undisputedly contributed by the complainant and other members. 11. It is evident from the minutes of the society meeting dated 31.01.2021 that the society has decided to issue legal notice to A2 for transfer of entire land, which is registered in name of Tribha ventures. There is an acknowledgment of the members of the society that the cash receipts with phone numbers of all members who paid cash/cheque/online transfer/challan/DD shall be given to the members by 02.02.2021; there is also reference that land in Sy. No. 320/321 (extent Ac. 1.27 guntas) registered in the name of A1 and others shall registered to the society by 03.03.2021; another land in Sy. No. 236 (extent 1 acre) for which agreement amount of Rs.1.5 crore paid by the society, the sale agreement for the said land shall be done in favour of the society by 03.03.2201; sale agreements entered into by the society toward land procurement viz. 70 lakhs, 20 lakhs and 11 lakhs for land in Sy. No. 341 respectively shall be registered in the name of the society by 02.02.2021 and it was agreed in the meeting that no additional amount shall be paid from the members towards any activity. 12. 70 lakhs, 20 lakhs and 11 lakhs for land in Sy. No. 341 respectively shall be registered in the name of the society by 02.02.2021 and it was agreed in the meeting that no additional amount shall be paid from the members towards any activity. 12. A report submitted by the Assistant Registrar, O/o. J.R. District Co-operative Officer, Sangareddy District to the District Co-operative Officer dated 05.06.2021 reveals that the society is having bank account No. 37443649681 in SBI Branch, R.C. Puram with a balance of Rs.9218/- as on 24.12.2020 and all major payments are made by the society on or before 24.12.2020 itself. The society has collected Rs.21.80 crores from its members between the years 2017 -- 2021. The audit of the society has been conducted from 2017-2020 but for the year 2020-2021 the audit is so far not conducted. Out of Rs.21.80 crores, the society had paid the amounts to different stake holders under proper acknowledgements/cash receipts for purchase of land, mediators, builders and owners of land without acquisition and possession of legal free land to such an extent to be required by the society. An amount of Rs.5,35,00,000/- was paid to A2 and other amounts have been paid to several persons, who appear to have transferred the land under various sale deeds in the name of Tribha ventures represented by A2. A sum of Rs.2,37,70,372/- was paid to Satya Vasu (who is vendor No. 1 in sale deed dated 05.07.2019 bearing document No. 30610/19 whereunder an extent of Ac. 0.26.67 guntas in Sy. No. 236 at Muthangi village was purchased by A2 originally under agreement of sale cum GPA dated 04.02.2019 and later transferred the sale deed dated 05.07.2019 in favour of Tribha ventures represented by A2). A sum of Rs.4,05,07,871/- was paid to N. Veerendra and another (vendors in sale deed dated 20.05.2019 bearing document No. 22238/19 whereunder an extent of Ac. 2.35 guntas in Sy. No. 324 was transferred in the name of Tribha Ventures). Thus, it is clear that the amounts of the society and contributed by its members including the complainant was utilized for purchasing land in the name of A2 and his company Tribha Ventures. 13. 2.35 guntas in Sy. No. 324 was transferred in the name of Tribha Ventures). Thus, it is clear that the amounts of the society and contributed by its members including the complainant was utilized for purchasing land in the name of A2 and his company Tribha Ventures. 13. This Court is of the prima facie opinion that the defacto complainant and other members of the society, who have contributed their hard earned money, have been duped and there money has been diverted for wrongful purposes and purchasing land in the names of A1 and A2, instead of purchasing the land in the name of the society. Hence, grant of anticipatory bail to A1 and A2 would impede the investigation and there is every possibility of the accused persons misusing their liberty to wipe out the evidence. A detailed investigation is necessary for seizing the records of the society; finding details regarding transfer of money from A1 to A2; misappropriation of money by A1 and A2; diversion of funds by A1 and A2 for purchasing land in their personal names and for seizing the documents/sale deeds entered into/registered in the name of A1, A2 and his company Tribha Ventures. Hence, this Court is not inclined to grant bail to A1 and A2. The criminal petitions are accordingly dismissed. Pending miscellaneous applications, if any pending, shall stand closed.